"The cabinet decided to invoke the emergency decree to take care of the situation and to enforce the law," deputy prime minister Surapong Tovichakchaikul said.

The move follows weeks of mass rallies in the city that have sparked several bouts of violence, including grenade attacks and shootings that each side has blamed on the other.

But Ms Yingluck says her government has no intention of confronting the protesters, who have been allowed to close off several government buildings, including her own.

"We will use peaceful negotiations with the protesters in line with international standards," she told reporters.

"We have told the police to stick with international standards, to be patient with the protesters."

Labour minister Chalerm Yubamrung will oversee the implementation of the emergency decree.

We need it because the protesters have closed government buildings, banks and escalated the situation, which has caused injuries and deaths.

Labour minister Chalerm Yubamrung

"We need it because the protesters have closed government buildings, banks and escalated the situation, which has caused injuries and deaths," he said.

"The government sees the need to announce the emergency decree to keep the situation under control.

"We will not use force. We have no policy to disperse (the protesters) and we haven't announced a curfew yet."

The emergency decree gives security agencies the power to impose curfews, detain suspects without charge, censor media, ban political gatherings of more than five people and declare parts of the capital off-limits.

Protesters staging self-styled shutdown

Ms Yingluck is under intense pressure from demonstrators, backed by the royalist establishment, to step down and install an unelected "people's council".

She has called for an election on February 2 but the main opposition party is boycotting the vote.

The Election Commission said it would seek a Constitutional Court ruling on Wednesday as to whether it can delay the vote.

It says that the protesters have prevented some candidates from registering.

The demonstrators have staged a self-styled shutdown of Bangkok since January 13, erecting roadblocks and rally stages at several key intersections, although the number of protesters has steadily fallen since the middle of last week.

Dozens of people were wounded and one killed in grenade attacks by unknown assailants on opposition rallies on Friday and Sunday.

The incidents have heightened fears of growing unrest ahead of next month's election.

In a potentially worrying development for Ms Yingluck, whose power base depends heavily on rural support, some farmers have threatened to join the protesters if they do not get paid for the rice they have sold to the state.

A scheme under which farmers are guaranteed an above-market price for their rice has been a government centrepiece, but as financing strains mount some farmers are complaining they have been waiting for months for payment.

The kingdom has been periodically rocked by political bloodshed since former prime minister Thaksin Shinawatra, Ms Yingluck's older brother, was overthrown by royalist generals in a coup seven years ago.

The latest protests were triggered by a failed amnesty bill that could have allowed Mr Thaksin to return without going to jail for a past corruption conviction.

The demonstrators accuse the billionaire telecoms tycoon-turned-politician of controlling his sister's government from his base in Dubai.

Mr Thaksin has strong electoral support in northern Thailand, but he is reviled by many southerners, Bangkok's middle class and members of the royalist establishment.